Overview

The Federal Financial Relations Act 2009, enacted by the Parliament of Australia, aims to provide a legal foundation for the intergovernmental financial relationships between the Commonwealth and the States and Territories. This Act was introduced to address the need for a structured and transparent framework for financial support between these levels of government, ensuring effective policy development and service delivery. The Federal Financial Relations (General purpose financial assistance) Determination No. 97, made in April 2017 by the Treasurer under section 9 of the Act, outlines the manner in which general purpose financial assistance is to be provided to the States. This assistance, which includes payments other than GST, is designed to support the States in their service delivery efforts, and is part of the broader commitment under the Intergovernmental Agreement on Federal Financial Relations (IGA). The policy objective is to facilitate collaboration and support service delivery across various policy areas, as determined by each State.

Scope and Application

The Federal Financial Relations Act 2009 and its associated determinations, including the Federal Financial Relations (General purpose financial assistance) Determination No. 97, establish the framework for the Commonwealth's provision of general purpose financial assistance to the States and Territories. This legislation applies to the Commonwealth government, which is obligated to credit amounts to the COAG Reform Fund for the purpose of providing financial assistance to the States, who in turn can use these funds for any service delivery effort. This assistance is part of the broader commitment under the Intergovernmental Agreement on Federal Financial Relations, which was developed through extensive consultation with the States and is publicly available. The scope of the Act extends to the Commonwealth's obligation to make these payments in a prescribed manner, as outlined in the determination, which is not subject to disallowance. While the amounts paid to each state can be directed towards a variety of services, the Act and its implementation are designed to promote multiple human rights by supporting service delivery in multiple policy areas. The determination commenced on the day it was made, ensuring that the Commonwealth's obligation under the IGA is upheld.

Key Provisions

The Federal Financial Relations (General purpose financial assistance) Determination No. 97, made under section 9 of the Federal Financial Relations Act 2009 (FFR Act), sets out the provisions for the distribution of general purpose financial assistance to the States and Territories from the Commonwealth. This determination, issued by the Treasurer, is a legislative instrument that is registered on the Federal Register of Legislation (sections 1, 13). It outlines the total cumulative payments of general purpose financial assistance for the year 2016-17, although there is a noted error in the table provided, which mistakenly includes National Partnership payments instead of the intended general purpose financial assistance payments (section 13). Despite this error, the crediting of the specified amounts to the COAG Reform Fund, as stated in section 10 of Part 3, remains lawful and does not affect the overall operation of the determination. Under this determination, the Assistant Minister to the Treasurer is authorised to credit the COAG Reform Fund with specified amounts intended for the provision of general purpose financial assistance to the States. These credits are then used to make grants to the States, as outlined in the FFR Act (section 9). The COAG Reform Fund Act 2008 establishes the fund as a special account under the Public Governance, Performance and Accountability Act 2013 (sections 9, 10). The obligation to make these payments is mandated by the Intergovernmental Agreement on Federal Financial Relations (IGA), which was extensively consulted upon and agreed to by the Council of Australian Governments on 29 November 2008 (section 1). The IGA and this determination collectively ensure a structured approach to the distribution of financial assistance, promoting collaboration and service delivery across the Commonwealth and the States. The determination imposes specific obligations on the Commonwealth to make payments of general purpose financial assistance in a manner consistent with the IGA. The Commonwealth is obligated to credit the COAG Reform Fund with the specified amounts, which are then used to provide grants to the States. This process ensures that the Commonwealth fulfils its commitment under the IGA to support the States' service delivery efforts. The exemption from the disallowance provisions of the Legislation Act 2003 allows the Treasurer to ensure compliance with these obligations without the need for disallowance (section 1). The IGA’s stipulations are intended to maintain transparency and accountability in the distribution of financial assistance. Breaching the obligations set out in this determination could lead to legal consequences. Although the determination itself is not subject to disallowance, failure to comply with the Commonwealth's obligations under the IGA could result in legal action or other remedies. The IGA, being a key agreement, underscores the importance of adhering to the agreed-upon financial assistance provisions. However, the determination does not specify particular offences, penalties, or consequences for breaches. The general legal framework governing the IGA and the FFR Act would apply in such cases, and the specific penalties would depend on the nature and severity of the breach.